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Saturday, April 11, 2015

India to open temple vaults?

The two-century-old Shree Siddhivinayak temple in Mumbai devoted to the Hindu elephant-headed god Ganesha bristles with close circuit cameras and is guarded by 65 security officers. It is one of India's richest temples, having amassed 158 kg of gold offerings, worth some $67 million, and its heavily guarded vaults are strictly off limits.

India is the world's biggest consumer of gold and its ancient temples have collected billions of dollars in jewelry, bars and coins over the centuries - all hidden securely in vaults, some ancient and some modern. A few years ago a treasure of gold worth an estimated $20 billion was discovered in secret subterranean vaults in the Sree Padmanabha Swamy temple in Kerala state.

Prime Minister Narendra Modi wants to get his hands on this temple gold, estimated at about 3,000 tonnes, more than two thirds of the gold held in the U.S bullion depository at Fort Knox, to help tackle India's chronic trade imbalance. Modi's government is planning to launch a scheme in May that would encourage temples to deposit their gold with banks in return for interest payments.

The government would melt the gold and loan it to jewelers to meet an insatiable appetite for gold and reduce economically-crippling gold imports, which accounted for 28 percent of India's trade deficit in the year ending March 2013. India's annual gold imports of 800 to 1,000 tons could be cut by a quarter if temples decided to participate in the scheme, say government and industry sources.

India's love affair with gold spans centuries is rooted in the Hindu religion. One of the biggest annual buying seasons is the Diwali festival around October to November. Gold marriage dowries are widespread and with 70 percent of the population rural, gold is financial security.